Latest Updates on Automobile Industry in Pakistan 2023

Pakistan's Automobile Industry (Updates as of 2023)

Update (February 7, 2023): Volkswagen's arrival in Pakistan is when? To learn more, click the link!

The local vehicle manufacturing industry, which contributes 4% of the nation's GDP, is crucial to the development and stability of the overall economy. This is one of the main reasons the federal government is doing everything in its power to support the sectors that produce vehicles locally.

The development of affordable hatchbacks and mid-size sedans, two of the most popular car categories in Pakistan, is currently the focus of the public and private industry participants. The majority of the vans and minivans utilized in the nation are utility and commercial vehicles, so there is also a high demand for them.

SATURATION OF THE MARKET AND THE LOCAL AUTO INDUSTRY

Pakistan's auto industry is currently built on a saturated market because there are so many imported options available these days. Although the growing number of imported vehicles is undoubtedly bad for the nation's economy, it continuously encourages local automakers and assemblers to provide goods that are both competitively priced and cutting-edge.

NEW ENTRANTS IN THE AUTO MARKET OF PAKISTAN

We are all known that Japanese manufacturers Suzuki, Toyota, and Honda have dominated Pakistan's vehicle market. They are known as Pak Suzuki, Toyota Indus, and Honda Atlas Cars locally as a result of their affiliation with regional businesses.

However, things are anticipated to change soon as new competitors enter Pakistan's car sector. Other well-known companies from across the world are preparing to take advantage of the chances that are currently accessible, keeping in mind the enormous potential of the local auto sector, which is based on the continuously rising consumer purchasing power.

Recently, South Korean automakers Hyundai Motor Company and Kia Corporation launched their vehicles in Pakistan. Recently, MG, a well-known British automaker with Chinese ownership, made its debut on the Pakistani auto market with its subcompact crossover lineup.

You may also be familiar with Changan. Since its debut, this Chinese brand has only sold minivans and numerous other utility vehicles in the local market. It wasn't until 2021 that it finally announced its first sedan, to be called "Alsvin."

For a business like Changan, it was a ground-breaking move that put it in direct rivalry with many other top car companies on the market.

THE FINANCIAL CONDITION

The Toyota Yaris and Honda City are direct competitors of Changan's tiny sedan, the Alsvin. Alsvin has more features than the latter options when the features are compared side by side. Since Changan is currently working to build its reputation in the market, it is now more concerned with pricing without sacrificing the qualities it delivers. It's one of the primary explanations for why the Changan is several thousand dollars less expensive than many other small sedans that directly compete with it.

CARS ENTIRELY "MADE IN PAKISTAN"

In Pakistan, there are a few local brands who are developing and marketing their own cars alongside foreign businesses who are expanding into the automobile sector to give consumers additional choices. Two notable examples in this regard are businesses like Regal Automobiles and United Auto Industries.

United Bravo and Prince Pearl, two 800cc small hatchback cars produced by these local manufacturers, respectively. These vehicles are even more affordable than Pakistan's least expensive Suzuki Alto model, costing around PKR 10 lakh.

PAKISTAN AUTOMOTIVE MANUFACTURERS ASSOCIATION (PAMA): WHAT IS IT?

The Pakistan Automotive Manufacturers Association (PAMA), as its name suggests, is an influential organization that represents the interests of Pakistan's automakers and other local businesses.
The group operates under a license from the Ministry of Commerce and complies with the Trade Organizations Ordinance of 2007. This association's main goal is to promote the expansion of the regional car industry. The association was established to represent the interests of the regional automakers and assemblers. The list of PAMA members is as follows:

Pak Suzuki Motor Co. Ltd

Indus Motor Co. Ltd.

Sigma Motors Ltd.

Hinopak Motors Ltd.

Ghandhara Nissan Ltd.

Master Motor Corporation Ltd.

Millat Tractors Ltd.

Atlas Honda Ltd.

Plum Qingqi Motors Ltd.

Fateh Motors Ltd.

Ravi Automobile Pvt. Ltd.

Sazgar Engineering Works Ltd.

Orient Automotive Industries Pvt. Ltd.

Eiffel Industries Ltd.

Yamaha Motor Pakistan Pvt. Ltd.

Al-Ghazi Tractors Ltd.

United Auto Industries Pvt. Ltd.

Hyundai Nishat Motor Pvt. Ltd

The nation's vehicle industry is about to experience exponential expansion in light of the impending federal government policies, subsidies, and other efforts. In the coming years, local vehicle assembling and manufacturing, which currently produces 250,000 units yearly, will multiply many times over. The government is presently attempting to meet the goal of producing 1 million vehicles locally each year.

Pakistan is currently working on its auto policy for the next five years, which will also include special incentives and waivers for hybrid and electric vehicles in the country to promote the idea of eco-friendly transportation methods nationally, according to Pakistan's ambassador to China, Moinul Haque.

Pakistan's energy policy

Pakistan joined the global EV revolution last year with the approval and launch of the framework for an auto policy promoting the idea of electric vehicles (EVs). The federal government has so far announced a reduction in taxes and fees in order to adopt numerous taxation and monetary measures in support of owners of EV and hybrid vehicles. The country's hybrid and electric car industry is anticipated to benefit further from the development of a comprehensive auto policy for the coming five years, which is now under development.

The value-added tax on the import of electric vehicles (EVs) has also been eliminated for the current fiscal year in the federal budget for 2021–2022. According to a long-term plan being developed by the authorities, within the next 15 to 20 years, at least 30% of all vehicles in the nation are to be converted to electric vehicles.

All around the nation, EV charging stations are being built. Recently, Pakistan's first electric motorcycle, which is produced and sold by Jolta Electric, was unveiled by Prime Minister Imran Khan. Given the aforementioned causes, it is anticipated that the number of electric vehicles would increase dramatically, thus diversifying the scope of the regional auto industry. Click on the highlighted text to read more about Pakistan's Electric Vehicle Policy.

NEWEST INFORMATION ABOUT PAKISTAN'S AUTO INDUSTRY

SKODA AND VOLKSWAGEN TO ENTERTAIN THE PAKISTANI AUTO MARKET

In partnership with Pakistan's highly regarded Premier Motors Ltd, Volkswagen AG is establishing its manufacturing facility in Balochistan. Once it is up and running, the world-class plant will be able to manufacture 30,000 Volkswagen and Skoda cars per month.

The facility is scheduled to be finished by 2024, according the specifics. The ground-breaking project would bring about the much-needed economic boom for the neighborhood's car industry, opening up a new source of income and opening up positions.

VEHICLES UP TO 1000CC COULD FINALLY BECOME CHEAPER

The customs charge assessed on imported equipment used to assemble compact automobiles with engines up to 1000cc has been reduced by up to 15%. The government's revenue division released an amended notification that notified the reduction in duties.

The letter went on to say that the 15% duty decrease only applies to the newest vehicle models that have been approved by the Engineering Development Board (EDB). The discount is good for the following three years.

THE FIRST HYBRID SUV TO BE LOCALLY ASSEMBLED IN PAKISTAN

In a recent development, Sazgar Engineering Works partnered with Chinese automaker Haval to release the first hybrid SUV built in Pakistan. The formal release of the Haval H6 SUV represents a significant innovation for the regional car sector.

Officials from the corporation provided some specifics and details during the SUV's unveiling event. A 1.5-liter turbocharged petrol engine powers the C-segment crossover SUV known as the Hybrid-Electric Vehicle (HEV). It generates 240 horsepower and 530 Newton-meters of torque.

Official claims state that the Haval H6 can accelerate from 0 to 100 kilometers per hour in about 7.5 seconds. The automobile will directly compete with other hybrid vehicles including the Honda CR-V, MG HS PHEV, and Toyota RAV-4 Hybrid.

The modern features of this crossover SUV include adaptive cruise control, smart infotainment features, traction control, and 360-degree cameras with collision warning. The top-tier Haval H6 HEV model costs approximately PKR 9.75 million.

August 5, 2022, update:

2022 PAKISTAN AUTO SHOW EXPO

The Pakistan Auto Show (PAS) Expo 2022, which recently took place in the Expo Centre Lahore, featured EVs as well as a ton of other brand-new vehicle options. The Federal Ministry of Industries and Production worked with the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) to plan the event.

Leading domestic and international automakers participated in this event. At the Pakistan Auto Show Expo this year, Pak Suzuki Motors unveiled three new vehicles: the Every wagon, the XL-7 midsize SUV, and the Wagon R Stingray hatchback.

Along with major participants in the sector, numerous small businesses displayed their locally made goods. The show included three-wheeled EVs with cutting-edge specifications, the nation's first-ever all-electric loader motorbike, and an E-bike made specifically for women, in light of the growing trend of EVs in Pakistan. For car enthusiasts and industry stakeholders, PAS Expo 2022 ended up being one of the most popular events of the year.

Sales of cars saw a significant increase in FY22.

The fiscal year 2021–2022 ended up being a turning point for Pakistan's auto industry. Many foreign automakers entered the Pakistani market and established their manufacturing facilities there since the federal government discouraged imports and supported local manufacturing.

In the neighborhood auto market, shoppers have more options than ever. In FY22, sales of a variety of vehicles increased, including hatchbacks, sedans, CUVs, SUVs, pickup trucks, buses, and heavy-duty trucks. The Pakistan Automotive Manufacturers Association disclosed these facts (PAMA).

By selling 16,009 units and 1,871 units, respectively, last month, Pak Suzuki, the most well-known auto industry titan in Pakistan, and Hyundai Nishat broke previous records for monthly automobile sales. On the other hand, rickshaw and motorbike sales were somewhat down from the prior fiscal year.

SUV MANUFACTURED NEARBY

Changan Motors, a well-known Chinese automaker, has teamed up with Master Motors Ltd. to establish a production facility in Pakistan. In a recent development, Master Changan Motors exported the first Changan Oshan X7 SUV-class car made in the country with success.

The only other nation besides China that is currently producing the most recent Changan Oshan X7 model is Pakistan. All Original Equipment Manufacturers, or OEMs, would be required to commence car exports in accordance with the new auto policy.

The scope of the nation's export business would grow, and the domestic manufacturing sector would be greatly strengthened. In a recent press release, Master Changan Motors provided these data.

It's time for us to wrap up now that we've provided you with all the most recent information and important facts about the Pakistani automotive sector. You can send us an email at support@rightdeed.com if you have any inquiries or comments about the subject.

On a related subject, you might be interested in reading our thorough blog on the current auto loan rates in Pakistan if you want to understand more about car financing in that nation. Additionally, if you reside outside of Pakistan, you should read our article on the Roshan Apni Automobile Scheme, which lowers the overall cost of car financing for non-resident Pakistanis by up to 20%.

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